Home » British Trade Policy » Hitting the Right Note with Russia

Hitting the Right Note with Russia


August 2016

by John Brian Shannon

Renewing Economic Ties with Russia

It may surprise some that for hundreds of years Britain enjoyed a good working relationship with Russia mainly via their respective Royal Families, and that the Allied Powers received especially valuable cooperation from the Soviet Union during WWII. And after the breakup of the Soviet Union, Britain once more enjoyed a strong relationship with Russia and it’s leaders.

All of which means, there’s no reason good enough that the UK can’t enjoy a mutually beneficial relationship with Russia. All that’s required is to hit the right note to resume that formerly beneficial relationship.

Russia has much to offer Britain — especially in light of the Brexit vote. It’s a country rich in oil and gas, metallic ores and minerals, and in forestry and agriculture. In short, all the resources that a developed nation needs.

UK trade with Russia.

Britain needs all these things to grow its economy. Treemap of Russia exports (2014)

But more than that, Russia is a rapidly modernizing nation with 146 million consumers who have displayed a distinct appetite for travel and for European history.

Buying massive amounts of raw resources from Russia, adding value to them, then exporting them to the global marketplace is a natural for the United Kingdom. In this way, the future of Britain would be inexorably linked to Russia and in a mutually beneficial way. As demand for value-added goods rise, so will demand for Russia’s resources.

This is the kind of symbiotic relationship that Britain must advance with Russia, as it’s the only model that is a ‘Win-Win’ for both nations.

As we’ve seen in recent decades, setting up Win-Lose paradigms eventually leads to Lose-Lose outcomes.

Therefore, Win-Win is the only acceptable course for Britain in regards to Russia.

Renewing Strategic Ties with Russia

During WWII, the level of cooperation between the former Soviet Union and Britain was at an all-time high. The Soviets lost +20 million people during the war as the Soviet Army struggled against Hitler’s Operation Barbarossain the largest German military operation of World War II.”

But Soviet communications with Britain were of uniformly high quality and information content, and weren’t intercepted by the Nazis as had been feared by British commanders.

The ‘Lend-Lease’ programme, created by the United States and Great Britain to assist their ally, exported aircraft, navy ships, howitzers, and ammunition to the Soviet Union in an attempt to stop Hitler’s army from taking the entire country along with its unimaginable resources.

The cooperation between the three countries during WWII was unparalleled and it worked to benefit all three nations. Millions of lives were saved (especially in Britain) due to this unprecedented arrangement.

Opportunities as Big as the Sky, Where Economic and Strategic Links Meet

It makes sense that northern nations should work together to advance security in their hemisphere, particularly among those nations that own or claim part of the Arctic Ocean and its rich resources.

It would be interesting to locate some Scottish islands where the wind blows constantly (that would be all of them) and install a couple hundred wind turbines along with housing for +3000 presently unemployed blue-collar workers, so they might smelt aluminum ore for export.

But not only aluminum, refining crude oil or making steel uses obscene amounts of electricity too. With cheap wind power located right on-site — one of the biggest production costs for smelters and refiners (energy) is lowered by half — which translates into a pricing advantage for exporters.

Working together, hundreds of billions of pounds could be unlocked to invest in Russian oil and gas, and other resources, inside Russia proper or in the Arctic Ocean.

Hundreds of billions more could build new factories in Russia, taking advantage of the lower energy, labour and regulatory costs there, which could allow Russia to duplicate the astonishing manufacturing leap made by Japan in the 1970-2000 timeframe.

If British banks are financing these operations, and British companies are part-owners with their Russian counterparts, there will be plenty of incentive on all sides to make it work. The very definition of Win-Win.

Over the next 30 years Russia could match the incredible economic leap made by Japan while Britain’s banks get to earn profit on financing that transition, and both British and Russian workers enjoy a fast-paced and profitable economy.

Isn’t that a better future for British and Russian kids than sliding backwards toward a new Cold War?

Image credit: By Celinaqi – http://atlas.cid.harvard.edu/explore/tree_map/export/rus/all/show/2014/ CC BY-SA 4.0


  1. Tim Walker says:

    One thing to consider is the end of NATO. Not only did the alliance lose its purpose, but a European Union army would make NATO over redundant.

    • Hi Tim,

      I agree with your points. NATO has fulfilled it’s original mission and has been redundant since 1991.

      In a recent article, Brexit: The Trigger for a New Atlantic Alliance, I’ve discussed the need for a new alliance of Atlantic-only nations, primarily an economic alliance, but yes, international trade moves via ocean shipping more than every other mode of transport put together. And those trillions of pounds sterling travelling the Atlantic sea-lanes need to be protected from at-sea piracy, while crews might need rescue from the sometimes treacherous ocean weather.

      My proposal for an Atlantic Alliance must surely have as one of it’s most important pillars, an Atlantic Ocean-only combined naval and air force commensurate with the vast size of the Atlantic, but also commensurate with the number of ships and aircraft traversing both the South Atlantic and the North Atlantic Ocean. Every Atlantic Alliance member nation could contribute ships and aircraft to the unified Atlantic Alliance command, and have a representative number of seats at the command HQ.

      While NATO was primarily an air force and army-based force, with significant ability for foreign operations (force projection) the primarily naval and air powered Atlantic Alliance force would remain a ‘stay-at-home’ force — operating in the North and South Atlantic Ocean exclusively.

      I do see the end of NATO from here in 2016.

      What the proposed Atlantic Alliance needs is an air and naval force to protect it’s member states and shipping and airline traffic throughout the Atlantics.

      What continental Europe now needs is a primarily land-based force with a Med-based and Black Sea-based naval complement, and a EU-only air power component, to protect the EU nations from external attack, of course — and (just as important) to enforce Schengen Area border controls — in a unified command structure.

      Again, thank you for all of your valuable comments here at Letter to Britain!

      Cheers, JBS

  2. Tim Walker says:

    One thing to watch is the interaction between Putin and Trump.

    We seem to be in a transitional period, a time of changing politics. A time of dealignments, perhaps leading to realignments.

    What if the U.S. government should adopt a stance of neutrality towards Russia? What if Britain should cultivate Russia as a trade partner?

    • Hi Tim,

      I think your comment is 100% accurate.

      If the new U.S. administration decides to adopt a neutral stance towards Russia and dial-down the Cold War rhetoric of recent months, it would be the wisest possible course.

      From my perspective, I can’t allow any more damage to occur in the relationship (whatever form that relationship has been, is now, or will be in the future) between Russia and the West.

      It’s on us, every one of us to ensure it doesn’t go any farther than it has.

      These young ‘Cold War kids’ have no idea about the Cold War, and we can’t let them lead us astray — travelling backwards in thought and time.

      The Cold War was ended by brighter minds than what are ruling many countries nowadays. And it must stay ended — for life to continue on this planet.

      The ‘Cold War kids’ don’t realize that we’d be living in a far different world had the Soviet Union (our valiant and long-suffering ally in the fight against the German Nazis) not jumped into WWII with everything they had. The Soviets lost +20 million people during Hitler’s Operation Barbarossa alone — the largest German military operation of World War II.

      The Memoirs of Field Marshal Georgy Zhukov are a candid, astonishing and horrifying read of the Soviet Union’s huge commitment to the Allied Powers in WWII. Highly recommended.

      Back to today’s world…

      Even though I’ve already alluded to it here, it would be the best possible course for a post-Brexit Britain to cultivate a warm, business-oriented relationship with Russia. It has the potential to be a ‘Win-Win’ relationship at every level.

      Wishing you a very Happy New Year! JBS

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